Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
03899 CIMC ENRIC
RTNominal down5.920 -0.080 (-1.333%)
Others

04/10/2018 10:26

[I-bank focus]Concern on connection fee cut overdone - Daiwa

[ET Net News Agency, 4 October 2018] Daiwa Research noted that city-gas distributors'
share prices have corrected by 11-19% in the past two days as investor concerns on a
connection fee cut intensify.
The research house believes upfront fees will be gradually cancelled across China, but
the earnings impact to HK-listed gas players is likely to be limited, given upfront fees
do not exist in many cities and hence only accounts for an insignificant portion of their
connection income.
Daiwa said ENN Energy (02688) does not collect any upfront fees. The research house also
sees the likelihood of cancellation of other parts of the connection fee as low because
the installation of gas asset within private spaces which are not compensated by the
distribution tariff.
Daiwa also said the actual opearting profit margin (OPM) of connection fee is less
lucrative at 34% (not a face value of 46%), implying limited room for a cut.
Assuming a 15% cut in connection fees (implying 19% OPM), Daiwa sees 10-19% cut in gas
distributors' 2020 net profit, which is already fully reflected in the 11-19% decline in
share price since 27 September.
It thus advised investors to tap into the strong gas consumption growth in China through
names through Kunlun Energy (00135) and CIMC Enric Holdings (03899), rather than the pure
city-gas distributors. (KL)

Remark: Real time quote last updated: 23/09/2024 17:59
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2024 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.